Chapter 2 Quiz

The amount you would have left if all assets were sold and all debts were paid in full is called your

net worth

The statement that includes liquid assets, real estate, personal possessions, and investment assets is known as a

personal balance sheet

Rebecca Wilson budgeted $395 for a new wardrobe in June. She actually spent $425. What is her budget variance?

$30 deficit

Kara George received a $5,000 gift for graduation from her uncle. If she deposits this in an account paying 3 percent, what will be the value of this gift in 12 years? Use Exhibit 1-A. (Round time value factor to 3 decimal places and final answer to the nearest whole dollar.)

$7129

An example of a fixed expense is

A mortgage payment

The equation to calculate net worth is

Assets - Liabilities = Net worth.

The current financial position of an individual or family is best presented with the use of a

Balance sheet

The document that would tell you what you received and spent over the past month is the

Cash flow statement

Which of the following is a cash inflow?

Income from employment

Fran Powers created the following budget and reported the actual spending listed. Calculate the variance for each of these categories, and indicate whether it was a deficit or a surplus. (Input all amounts as positive values.)

Item Budgeted Actual Variance Deficit/Surplus Food $ 360 $ 298 $ 62 surplus Transportation $ 320 $ 334 $ 14 deficit Housing $ 950 $ 982 $ 32 deficit Clothing $ 110 $ 134 $ 24 deficit Personal $ 275 $ 231 $ 44 surplus